MUMBAI: Viacom has acquired Hollywood studio DreamWorks SKG for $1.6 billion, the New York Times reported on Saturday.

Viacom and its studio division, Paramount Pictures, signed the acquisition deal on Friday, 9 December at a meeting attended by DreamWorks founders Steven Spielberg, Jeffrey Katzenberg Geffen, Viacom chief executive officer Tom Freston and Paramount chairman Brad Grey, the report said quoting executives involved in the negotiations.

More than 50 per cent of the money will come from private-equity investors, the executives have been quoted as saying in the report. The price includes the assumption of about $400 million in DreamWorks' debt.

The report further adds that DreamWorks discontinued its acquisition talk with NBC-Universal unit of General Electric as the latter's offer failed to match Viacom's price.

By acquiring DreamWorks, Paramount gets the right to distribute domestically and internationally movies made by the company's animation division DreamWorks Animation. Apart from getting hold of DreamWorks' 60-movie library, Paramount can now capitalise on DreamWorks' lucrative and expanding computer animation business, the report points out.

By clinching the deal, Viacom has also delivered a body blow to Universal. The company had been making huge profits by distributing DVD and video for DreamWorks live-action and animated films, both domestically and internationally.